Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

Shree Cement - Sustaining industry leading growth and profitability - ICICI Securities

Posted On: 2020-11-18 01:32:13


Shree Cement's (SRCM) Q2FY21 standalone EBITDA of Rs9.9bn (up 17% YoY) was significantly ahead of our / consensus estimate owing to better than expected realisation and lower costs. Blended realisation declined 2% QoQ (I-Sec: 4%); while costs declined 9% YoY (I-Sec: 8%). Market share gains continues for SRCM with volumes increasing 14% YoY while sustaining industry-leading EBITDA/te of Rs1,513/te (I-Sec: Rs1,397/te). SRCM may continue to gain market share backed by non-trade volume push in North, strong demand in East and higher YoY utilisation in South. SRCM's consistent track record of market share gains coupled with industry-leading margins justifies its premium valuation, in our view. We raise our FY21E EBITDA by 4% and increase our target price to Rs28,000/share (earlier Rs25,800) based on 17x Sep22E EV/E on half yearly rollover. Maintain BUY.

- Standalone revenue increased 8% YoY to Rs30bn, in line with our estimates. Cement plus clinker volume increased 14% YoY at 6.53mnte (in-line with our estimates) owing to market share gains across regions. Blended realisation declined 2% QoQ/ 5.5% YoY to Rs4,581/te vs our estimate of 4% QoQ decline. Our channel checks suggest that cement prices have increased by Rs10-15/bag in trade segment and Rs25-30/bag in non-trade segment in North, while they have remained broadly flat MoM in East and South regions in Oct'20.

- Standalone EBITDA increased 17% YoY to Rs9.9bn (I-Sec: Rs9.2bn). Blended EBITDA/te (including power) increased 3% YoY to Rs1,513/te (I-Sec: Rs1,397/te). Total cost/te declined 9% YoY to Rs3,114/te. Raw material plus power & fuel cost/te declined 21% YoY owing to lower fuel prices. Freight cost/te increased 7% YoY on increase in diesel prices. Other expenses/te (including employee costs) declined 9% YoY owing to better operating leverage. Depreciation declined sharply 35% YoY to Rs2.8bn; while other income increased 77% YoY owing to higher treasury surplus. Company has utilised Rs5.7bn from Rs24bn equity raise till Sep'20-end.

- Consolidated revenue / EBITDA / PAT stood at Rs32.5bn / Rs10bn / Rs5.3bn respectively in Q2FY21. UAE-based Union Cement's EBITDA declined 62% YoY to Rs117mn; though has improved QoQ from EBITDA loss of Rs127mn in Q1FY21.

- EBITDA to OCF conversion was strong at 127% aided by Rs6.4bn working capital release. Consolidated FCF generation stood at Rs15bn post capex spend of Rs4bn in H1FY21 increasing net cash to Rs50bn. SRCM may generate FCF of Rs62bn after factoring-in capex of Rs49bn for organic expansions over FY20E-FY23E with net cash increasing to Rs103bn by FY23E. We model standalone volume CAGR at 13% over FY20-FY23E and expect blended EBITDA/te to increase to Rs1,571/te by FY23E from Rs1,474/te in FY20 (Rs1,467/te in H1FY21).

Shares of SHREE CEMENT LTD. was last trading in BSE at Rs.23866.95 as compared to the previous close of Rs. 23364.75. The total number of shares traded during the day was 3864 in over 1062 trades.

The stock hit an intraday high of Rs. 24075 and intraday low of 23462.55. The net turnover during the day was Rs. 92210858.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Monetary Policy - Mr. Rajiv Sabharwal, MD and CEO, Tata Capital

RBI maintains status quo, realtors rely on increased demand

Cadila receives DCGI approval - Angel Broking

Maintain BUY on UltraTech Cement - Speeding on organic expansions! - HDFC Securities

HCL Technologies - Quant Pick - ICICI Direct

Teamlease Services - Gladiator Stocks - ICICI Direct

Mindtree Ltd - Analyst Meet Update - ICICI Direct

Bajaj Finserv - Company Update - Dec 2020 - ICICI Direct

RBI Monetary Policy - Dec 2020 - Views of Industry Experts

RBI Monetary Policy - Dec 2020 - Views of Shanti Ekambaram, Group President - Consumer Banking, Kotak Mahindra Bank

Views on RBI Policy: Mr. Dhiraj Relli, MD &CEO, HDFC Securities

RBI monetary Policy - Dec 2020 - Angel Broking

View on RBI Monetary Policy - Dec 2020 - Mr. Amar Ambani, YES SECURITIES

Accommodative stance necessary to revive growth: Dr. Niranjan Hiranandani - President at ASSOCHAM & Chairman Hiranandani Group

Views on RBI Monetary Policy - Dec 2020 - Ms. Bekxy Kuriakose, Head - Fixed Income, Principal Asset Management

RBI stays put to aid in maintaining real estate sector recovery - Ramesh Nair, CEO and Country head, JLL India

Views on Dec, 2020 RBI Monetary Policy from Industry Experts

MPC - Dec 4, 2020 - Acuité Ratings & Research

Realty sector's hopes are high from RBI's MPC

Citibank issued a report on RBL Bank: Recommends 'BUY' with target price Rs. 275

Russia to adopt vaccination for Covid-19 - Angel Broking

68% of borrowers are unaware of their CIBIL score, reveals Home Credit Survey

Auto Sector - Monthly Volume Round-up - Nov 20 - Reliance Securities

What do brokerages say on Burger King India Limited's IPO?

The Phoenix Mills - Potential fund infusion may usher in growth - ICICI Securities

Godrej Agrovet - Beneficiary of 60% increase in palm oil prices - ICICI Securities

Automobiles (wholesale) - Wholesale dispatches rise amidst modest retail trends - ICICI Securities

Oil & Gas - Sector Update - Dec 2020 - ICICI Direct

Phoenix Mills (Buy): Asset monetisation at favourable terms... - ICICI Direct

Aditya Makharia's views on November Auto Sales Number for November 2020 - HDFC Securities

Burger King India - IPO Review - ICICI Direct

Quant Pick - LIC Housing Finance - ICICI Direct

Tech Mahindra - Analyst Meet Update - ICICI Direct

Gladiator Stocks - Crompton Greaves Consumer Electricals - ICICI Direct

Derivatives Monthly Outlook - Nifty support at 12800 for ongoing momentum...

Quant Pick - Sun Pharmaceuticals - ICICI Direct

Monetary Policy - Expectation from YES Securities

Sector Update on Asset Management Companies - Subdued but improvement expected - HDFC Securities

Pre Monetary Policy View - Dec, 2020 - Lakshmi Iyer, President and CIO (Debt) & Head Products, Kotak Mutual Fund

Maintain REDUCE on Siemens - Smart recovery priced in - HDFC Securities

Banking Sector Credit Trends - Growth continues to moderate - HDFC Securities

Q2 FY21 GDP: Light at the end of the tunnel - YES Securities

Siemens - Q4 FY20 Result Update - YES Securities

Super action in Home Loans - SBIN, ICICIBC, AXSB, HDFC and LICHF gaining share - YES Securities

Polymer price tracker - Dec 1, 2020 - PVC prices continue to tread higher - ICICI Securities

Bajaj Finance - Company Update - Dec 2020 - ICICI Direct

Siemens Ltd - Healthy revival in orders and margins - ICICI Securities

Covid Recovery Pulse - Nov 30, 2020 - Festive positivity continues in auto retails, e-way bill generation improves...

Derivatives Weekly View (November 27): Momentum expected to continue in broader markets with Nifty support at 12800...

Derivatives Strategy - Positional Option - ICICI Direct



Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2019